Physician’s Capitation Trends
Capitation boosts new, noninvasive technology
Devices can trim length of stay
Capitation is having its impact not only on practice management but also on many areas of medical technology. One of the most responsive areas of clinical technology is cardiac care. "Managed care and capitation payment systems that increase cost pressure on health care providers are reducing the average time a cardiac patient spends in intensive care," notes Health Industry Today, a technology specialty publication. "As a result, providers are relying to an ever-increasing degree on cardiac monitoring devices that can detect and prevent potential cardiac complications sooner, and with greater accuracy."
Many hospitals and physician practices are changing to noninvasive devices whenever possible and retiring their invasive counterparts. Noninvasive devices typically are safer, easier, and more efficient to operate.
Scientific advances, miniaturization in equipment, and increased computer capabilities have combined with the widely documented spread of cardiac disease to intensify research focus on these devices as well, says Manoj Kenkare, a financial analyst with Frost & Sullivan, a New York City-based technology investment firm. Kenkare describes the convergence of clinical, financial, and market trends in a report titled, "World Cardiac Output Monitoring Equipment Markets."
Heart failure is associated with one million hospitalizations and 250,000 deaths in the United States annually. Historically, heart attacks were treated in a single facility — the hospital. But as the health care market has become more complex, more web-like, and more built upon a string of systems, alliances, and networks, the provision of care has moved toward multiprovider systems, Kenkare notes. Payment systems are following suit. Physicians and hospitals often link their insurance commitments through global capitation, making lengthy hospital stays a concern of both hospitals and physicians.
One result is a growth in subacute products. These products enable patients to move from costly intensive-care beds to intermediate-care beds. Other products are aimed at promoting faster recoveries that lead to cost savings. Cardiac output monitoring devices are becoming vital for acute and non-acute care settings. These devices also are useful in pain clinics, which triage patients presenting with chest pain in the emergency room. Monitoring devices also help with decisions being made during observation periods.
Health care refocuses on core operations
The health community is recoiling from a period of major emphasis on "the whole continuum of care," says Stuart Friedman, vice president of the Tiber Group, a health care management consulting firm in Chicago. The buzz now is for health systems to back off this distribution-channel or population-based mentality and focus on improving core operations. But be wary of retreating too much to basics, Friedman says. "Health systems need to grow," he asserts. "As margins contract due to increasing costs and decreasing reimbursement, health systems must grow to ensure reinvestment in their communities."
Innovation for your hospital, health system, or group practice will be tough, but employers and consumers will continue to insist upon it, especially as the Internet drives information further into public view. Friedman predicts these additional technology trends based on cost pressures connected with information expansion:
- a large array of new genetic-based tests and treatments;
- an explosion of non-surgical devices;
- patients seeking to interact with their physicians electronically;
- physicians being required to order pharmaceuticals electronically;
- technology, automation, and standardization easing the nursing shortage.
To make the best use of technology and market pressures, Friedman recommends assessing your group’s product portfolio, defining new roles for your group practice, using partnerships strategically, operating to some degree as a venture capitalist, and balancing full service with focused "best of breed" services as well.
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